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AN ACT concerning corporations; relating to minority shareholders
  rights; amending K.S.A. 17-6516 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
  Section 1.  K.S.A. 17-6516 is hereby amended to read as follows: 17-
6516. (a) The district court, upon application of any stockholder, may
appoint one or more persons to be custodians and, if the corporation is
insolvent, to be receivers, of and for any corporation when one or more
stockholders of a corporation organized under the laws of this state, may
grant one or more forms of relief specified in subsection (c) when it is
established that:
  (1)  At any meeting held for the election of directors the stockholders
are so divided that they have failed to elect successors to directors whose
terms have expired or would have expired upon qualification of their
successors; or
  (2)  The business of the corporation is suffering or is threatened with
irreparable injury because the directors are so divided respecting the
management of the affairs of the corporation that the required vote for
action by the board of directors cannot be obtained and the stockholders
are unable to terminate this division; or
  (3)  The corporation has abandoned its business and has failed within
a reasonable time to take steps to dissolve, liquidate or distribute its assets.
  (b)  The district court, upon application of one or more stockholders
which individually or collectively owns of record at least 10% of the issued
and outstanding shares of all classes of common stock taken as a whole of
a corporation having 100 or fewer stockholders of record, may grant,
subject to subsection (b)(8) of K.S.A. 17-6002, and amendments thereto,
one or more forms of relief specified in subsection (c) when it is established
that:
  (1)  The directors or those in control of the corporation have acted or
are acting in a manner that is illegal or fraudulent or constitutes breach
of a fiduciary duty causing substantial injury to the corporation or the
stockholders; or
  (2)  material injury to the corporation has resulted from the misap-
plication or waste of a substantial portion of the corporate assets.
  (c)  If one or more of the grounds for relief described in subsection (a)
or (b) exist, the district court may order one or more of the following types
of relief:
  (1)  The appointment of one or more persons to be custodians and, if
the corporation is insolvent, to be receivers, of and for the corporation;
  (2)  the performance, prohibition, alteration or setting aside of any
action of the corporation or the prohibition or setting aside of any action
of those in control of the corporation, whether such action is taken in their
capacity as stockholder, director, officer or otherwise;
  (3)  the cancellation or alteration of any provision in the corporation's
articles of incorporation or bylaws;
  (4)  the removal from office of any director or officer;
  (5)  the appointment of any individual as director or officer;
  (6)  an accounting with respect to any matter in dispute;
  (7)  the payment of dividends;
  (8)  the award of damages to any aggrieved party; or
  (9)  such other relief as the court may deem fair and equitable under
the circumstances.
  (d)   A custodian appointed under this section shall have all the powers
and title of a receiver appointed under K.S.A. 17-6901, and amendments
thereto, but the authority of the custodian is to continue the business of
the corporation and not to liquidate its affairs and distribute its assets,
except when the court shall otherwise order and except in cases arising
under subsection (a)(3) of this section or subsection (a)(2) of K.S.A. 17-
7212, and amendments thereto. Any officer or director appointed under
this section shall have all the powers and duties specified in the articles
of incorporation or bylaws of the corporation, as limited or further spec-
ified by order of the court..
  Sec. 2.  K.S.A. 17-6516 is hereby repealed.
  Sec. 3.  This act shall take effect and be in force from and after its
publication in the statute book.